Buying a home can be a daunting task, and for most people, it is the biggest financial decision they will ever make.
For that reason, it is important to understand the steps involved in buying a home and what to expect at each stage.
Pre-Approval
Getting pre-approval is not only one of the most important parts of the process, but it can also be one of the most time-consuming.
A pre-approval is effectively an indication that a lender will likely approve your home loan when the time comes. A pre-approval is not a guarantee, and if your circumstances change, they are well within their rights to decline your application.
However, most of the time, if the home you are wanting to buy fits the criteria you have discussed with them and your circumstances haven’t changed, you shouldn’t have any problem getting a loan.
When you seek a pre-approval, you are basically going through the entire process of applying for a home loan, and you will need to provide all the appropriate documentation. This is why the process can be time-consuming, but having it done and also building a relationship with the lender is best done early on.
The person to talk to about getting a pre-approval is always your mortgage broker, as they will be able to advise you on which lender to approach and also give you a good indication of your chances of getting pre-approved and ultimately securing a home loan.
Application
Once you’ve found a potential home, you can then move on to the official application stage. The process will be very similar to that of the pre-approval stage, and it might only involve updating a few documents, for example, producing some up-to-date payslips.
Again, your mortgage broker will be handling most of this for you. The only real difference is that you will now be able to provide details of the property you are wanting to purchase.
Lenders do have criteria that they follow regarding how much they might lend and also areas (suburbs, etc.) or types of properties that they are willing to lend to.
For example, some lenders might not be willing to lend to people looking to buy small, inner-city apartments, houses in certain suburbs or even rural areas. Each lender is different, and your mortgage broker will be able to have this conversation with the lender well in advance.
Valuation
One of the most important parts of the process is the valuation stage. A lender will want to get the property assessed by a licensed and bank-approved lender prior to providing a borrower with finance.
A bank will want to know that you haven’t overpaid for a property so that in the event they need to sell the property, they will be able to do so and get their money back.
The valuation process is taken care of by the lender. However, the borrower will have to pay for it. Assuming they are happy with how the property looks and the price, you should be able to secure your approval.
From there, it is a matter of accepting the offer, and again, your mortgage broker can manage this with you and walk you through it.
Settlement
Once you’ve been unconditionally approved (also known as ‘formal approval’), you can look to hand over the remainder of the process to your mortgage broker and a settlement agent or lawyer.
Your settlement agent (or conveyancer) will be able to liaise with the various lenders and banks and make sure all the documentation is in order.
Your mortgage broker will be able to help you with getting all your home loan accounts set up.
When all the official paperwork has been taken care of and settlement has occurred, you are ready for your final inspection and you can then move into your new home.
If you have a question or would like more information, please contact…
Steve
Mobile 0423 894 864
steve@bettermoneylenders.com.au
Brett
Mobile 0428 156 680
brett@bettermoneylenders.com.au
